Analyzing the distributional impacts of
economic crises is an ever more pressing need. If
policymakers are to intervene to help those most adversely
affected, they need... Show More +
to identify those who have been hurt
most and estimate the magnitude of the harm they have
suffered. They must also respond in a timely manner. This
article develops a simple methodology for measuring these
effects and applies it to analyze the impact of the
Indonesian economic crisis on household welfare. Using only
pre-crisis household information, it estimates the
compensating variation for Indonesian households following
the 1997 Asian currency crisis and then explores the results
with flexible nonparametric methods. It finds that virtually
every household was severely affected, although the urban
poor fared the worst. The ability of poor rural households
to produce food mitigated the worst consequences of the high
inflation. The distributional consequences are the same
whether or not households are permitted to substitute toward
relatively cheaper goods. Households with young children may
have suffered disproportionately large adverse effects. Show Less -
Type: Journal Article
Report#: 77394
Date: September 1, 2002
Author:
Friedman, Jed ;
Levinsohn, James
Economic theory and recent empirical
work suggest that when formal regulation of pollution is
absent or less than 100 percent effective, affected
communities are often... Show More +
able to negotiate abatement from
plants in their vicinity through 'informal
regulation'. Using a model of equilibrium pollution,
this article confirms the existence of significant informal
regulation for unregulated pollutants in both Indonesia and
the United States as well as for regulated pollutants in the
United States. Combining plant level data with community
data in both countries, regressions reveal that even after
controlling for traditional economic variables such as
output levels and input prices as well as for plant
characteristics such as industrial sector and age, the per
capita income of affected communities significantly affects
pollution intensities. Higher-income communities win
significantly lower emissions in both countries and for both
unregulated and regulated pollutants in the United States,
presumably because income affects both preferences for
environmental quality and the ability to bring pressure on
polluting factories. Show Less -
Type: Journal Article
Report#: 77253
Date: September 1, 1997
Author:
Pargal, Sheoli ;
Wheeler, David ;
Manjula Singh ;
Hettige, Hemamala
Noting the trend toward more independent
trade unions in developing countries, this article examines
whether the presence of unions strengthens or weakens the
benefits... Show More +
to be gained from economic policy reform. We show
that the presence of 'passive' unions ones that
choose their wage employment contract given the firm's
cost-minimizing strategy increases the welfare gains from
trade liberalization, because trade reform lowers the wage
premium enjoyed by the unionized sector, reducing a
distortion in the labor market. These gains are amplified
when the unions are 'active,' namely, when they
negotiate a contract with the firm that is off its labor
demand curve. Such a contract results in featherbedding
paying workers more than their marginal product and trade
reform reduces the amount of featherbedding. The policy
implication for Bangladesh a country with strong trade
unions and a protected unionized sector is that the benefits
of further trade liberalization may be greater than
otherwise predicted. In Indonesia, where both unionization
and import tariffs are low, allowing greater independence to
unions may preserve flexibility and reward workers better
than the current minimum wage policy Show Less -
Type: Journal Article
Report#: 77235
Date: January 1, 1997
Author:
Thierfelder, Karen ;
Devarajan, Shantayanan ;
Ghanem, Hafez
In certain situations, economic
liberalization policies can increase the degree of spatial
centralization of resources and spatial concentration of
manufacturing in... Show More +
large metropolitan areas. In addition,
historical patterns of location make it difficult to alter
the degree of centralization. This article explores these
issues by specifying and estimating a nested logit model of
industrial location of manufacturing activity in Java,
focusing on the unincorporated sector. The results indicate
that plants strongly prefer locations with mature plants in
related industries, which offer a built-up stock of local
knowledge. In addition, the 1983 liberalization in Indonesia
was associated with increased centralization of the
unincorporated sector. Although the liberalization gave
unincorporated firms better access to government and other
centralized services, firms needed to centralize to take
advantage of these opportunities because the bureaucratic
process is centralized and communications are poor. The
relative increased growth of the corporate sector following
liberalization may also have helped to further draw
unincorporated plants into centralized locations. Show Less -
Type: Journal Article
Report#: 77126
Date: September 1, 1996
Author:
Henderson, J. Vernon; Kuncoro, Ari
This article documents the search for a
Dalton-improving tax and expenditure reform using a
methodology developed by Yitzhaki and Slemrod (1991) and
Mayshar and Yitzhaki... Show More +
(1995). The methodology overcomes the
need to define a specific social welfare function by
searching instead for reforms that improve each social
welfare function belonging to a wide class of functions. The
authors apply the method to the energy sector of Indonesia,
ignoring distributional constraints, and find that both the
subsidy on kerosene and the tax on gasoline should be
reduced. But taking distributional concerns into account,
the present structure of energy taxes is reasonable and the
country may benefit by increasing the subsidy to kerosene,
taxing electricity, and reducing the gasoline tax. These
conclusions are robust to changes in the relevant parameters
representing the Indonesian economy. Show Less -
Type: Journal Article
Report#: 77127
Date: September 1, 1996
Author:
Yitzhaki, Shlomo; Lewis, Jeffrey D.
Seven case studies - from Bolivia,
Colombia, Indonesia, Mexico, Nicaragua, Taiwan (China), and
Turkey - demonstrate the feasibility of conducting rigorous
impact evaluations... Show More +
in developing countries using randomized
control designs. This experience, covering a wide variety of
settings and social programs, offers lessons for task
managers and policymakers interested in evaluating social
sector investments. The main conclusions are: first,
policymakers interested in assessing the effectiveness of a
project ought to consider a randomized control design
because such evaluations not only are feasible but also
yield the most robust results. Second, the acute resource
constraints common in developing countries that often make
program rationing unavoidable also present opportunities for
adopting randomized control designs. Policymakers and
program managers need to be alert to the opportunities for
building randomized control designs into development
programs right from the start of the project cycle because
they, more than academic researchers or evaluation experts,
are in the best position to ensure that opportunities for
rigorous evaluations are exploited. Show Less -
Type: Journal Article
Report#: 13463
Date: July 31, 1994
Author:
Newman, John ;
Rawlings, Laura ;
Gertler, Paul
Indonesia has made great progress during
the past fifteen years in enhancing the command of the poor
over privately provided goods, such as food, clothing, and
housing.... Show More +
Has similar progress been made in improving their
access to publicly provided social services? The article
looks at how the use of health services and the incidence of
subsidies in the health sector varied across socioeconomic
groups in Indonesia in 1987. It also examines how the
distributions of utilization and subsidies altered between
1978 and 1987. The findings indicate that changes in
utilization patterns and in the incidence of subsidies have
been pro-poor. Disparities in access and utilization have
diminished. However, public spending on health care is not
yet well targeted. Show Less -
Type: Journal Article
Report#: 13329
Date: May 31, 1994
Author:
van de Walle, Dominique
This article analyzes the consequences
of financial liberalization, using a large panel of
Indonesian manufacturing establishments. It discusses
whether financial reforms... Show More +
have had an impact on investment
and on the allocation of credit and whether the effects
differ depending on the type of firms. The overall
conclusion is that shifting from administrative toward
market-based allocation of credit has increased borrowing
cost, particularly for smaller firms, but, at the same time,
has benefited firms by giving them widened access to finance. Show Less -
Type: Journal Article
Report#: 14096
Date: January 31, 1994
Author:
Harris, John R. ;
Schiantarelli, Fabio ;
Siregar, Miranda
The relative decline of agriculture in
growing economies is a central feature of economic
development and a major influence on agricultural policies.
The literature... Show More +
on the causes of this decline has focused on
the relative price effects arising from demand factors,
especially Engel's law, rather than on supply-side
influences, such as changes in relative factor endowments
and differential rates of technical change. This article
develops a simple structural model of the transformation of
the Indonesian economy, applying an error correction
mechanism to capture the dynamics resulting from
disequilibria and the costs of adjustment. The decline in
agriculture's share of gross domestic product is found
to be caused much less by the relative price effects
typically emphasized in the literature than by capital
accumulation and rapid technical change in agriculture. Show Less -
Type: Journal Article
Report#: 14077
Date: September 30, 1993
Author:
Martin, Will ;
Warr, Peter G.
Most estimates of the consequences of
public programs rely on the cross-sectional association
between region-specific programs and program outcomes. Such
estimates assume... Show More +
that the spatial distribution of programs
is random. This article reports estimates of the effects of
public programs on basic human capital indicators and the
biases in conventional cross-sectional estimates of program
effects due to non-random program placement. The estimates
are obtained from pooled observations on human capital
outcomes, socioeconomic variables, and program coverage at
the kecamatan (subdistrict) level. The observations are
based on successive sets of Indonesian cross-sectional
household and administrative data during 1976-86. The
determinants of the spatial allocation of programs in
Indonesia in 1976-86 are also estimated. The empirical
results indicate that the presence of grade and middle
schools in villages has a significant positive effect on the
school attendance rates of teenagers. The presence of health
clinics in villages also positively affects the schooling of
females ages 10-18. However, no evidence is found of any
significant effects of the presence of family planning and
health programs on either the survival rates of children or
on cumulative fertility. The estimates also suggest that the
use of cross-sectional data results in substantial biases in
the estimates of program effects because of the evident
nonrandom spatial allocation of public programs. Show Less -
Type: Journal Article
Report#: 14075
Date: September 30, 1993
Author:
Pitt, Mark M. ;
Rosenzweig, Mark R. ;
Gibbons, Donna M.
Analysis of the effects of policy
changes on the poor is often hindered by the difficulties
inherent in measuring poverty and comparing levels of
poverty before and... Show More +
after policy changes. This article
outlines two techniques which can overcome many of these
measurement problems: stochastic dominance conditions, which
can facilitate a robust poverty ranking of distributions of
living standards; and a decomposable poverty index, which
allows measured changes in aggregate poverty to be
disaggregated into their various components, such as the
changes among population subgroups, and growth and
redistributive components. These techniques can be applied
to a wide range of indicators of economic well-being and
poverty lines, and to assumptions about the poor. The
approaches are illustrated using household survey data from
Indonesia before and after external shocks and the
subsequent structural adjustment program in the mid-1980s.
The study finds that favorable initial conditions and
pro-poor pattern of growth enabled Indonesia to maintain its
momentum in poverty alleviation during the period. Show Less -
Type: Journal Article
Report#: 14202
Date: January 31, 1991
Author:
Ravallion, Martin ;
Huppi, Monika
In recent years, household survey data
from developing countries have increasingly become available
and have been increasingly used to cast light on important
questions... Show More +
of policy. The reform of prices, whether
agricultural prices, consumer taxes, subsidies, or tariffs,
has consequences for individual welfare and for government
revenues, and these can be investigated empirically with
household survey data. The gainers and losers from price
changes can be identified, and the magnitudes of their gains
and losses measured. Nonparametric estimation techniques
provide a straightforward and convenient way of displaying
this information. The procedure is illustrated for the
effects of rice pricing in Thailand using data from more
than five thousand rural households. Estimates of the
revenue effects of price reforms are harder to obtain,
because they require estimates of supply and demand
elasticities, estimates that are not easily obtained for
many developing countries. A procedure is presented for
estimating price elasticities of demand from spatial price
variation as recorded in household survey data. The main
innovations lie in the appropriate treatment of quality
variations and measurement error. Applications of the
procedure in Cote d'Ivoire, Indonesia, and Morocco are reviewed. Show Less -
Type: Journal Article
Report#: 14191
Date: May 31, 1989
Author:
Deaton, Angus
Export processing zones (EPZs) are
economic enclaves within which manufacturing for export
occurs under virtual free trade conditions. Many developing
countries have... Show More +
established EPZs in hopes of reaping economic
gains through employment, foreign exchange earnings, and
technology transfer. This article studies the benefits and
costs of EPZs in Indonesia, the Republic of Korea, Malaysia,
and the Philippines and reviews the relationship between the
welfare effects of EPZs and the host country's economic
policies. When the domestic economy is distorted, the EPZ
confers limited welfare gains. Nevertheless, EPZs are far
from the "engines of development" that some
countries had initially hoped they would become. Show Less -
Type: Journal Article
Report#: 14140
Date: January 31, 1989
Author:
Warr, Peter G.
Nigeria and Indonesia provide an
interesting contrast with regard to performance and policy
during and after the oil boom. Roughly a decade after the
first oil shock,... Show More +
Nigeria is faced with several economic
problems including a serious decline in its agricultural
sector and a deteriorating external debt situation. While
some decline in the nonoil traded goods sector reflects
efficient adjustment to the oil boom, policy with regard to
public expenditure, exchange rates, pricing, and the trade
regime could exacerbate such decline and impede readjustment
as the boom subsides. The links between oil prices,
deficits, inflation, and real exchange rate appreciation are
analyzed and Nigerian and Indonesian fiscal and exchange
rate and agricultural and foreign borrowing strategies are
compared. It is concluded that with the exception of cuts in
the deficit since 1984, Nigerian policy following the boom
has not been conducive to adjustment to the current period
of low oil prices and high real interest rates. Corrective
measures and policy options are discussed. Show Less -
Type: Journal Article
Report#: 14167
Date: May 31, 1987
Author:
Pinto, Brian
